Bill Text: NY A10351 | 2019-2020 | General Assembly | Amended


Bill Title: Relates to the forbearance of residential mortgage payments; requires New York regulated banking organizations to make applications for forbearance for residential mortgages available to qualified mortgagors during the period in which the NY on PAUSE order is in effect in the county wherein the qualified mortgagor is located and to grant such applications for a period of 180 days.

Spectrum: Partisan Bill (Democrat 27-0)

Status: (Introduced) 2020-05-27 - substituted by s8243c [A10351 Detail]

Download: New_York-2019-A10351-Amended.html



                STATE OF NEW YORK
        ________________________________________________________________________

                                        10351--B

                   IN ASSEMBLY

                                     April 29, 2020
                                       ___________

        Introduced by M. of A. ROZIC, GRIFFIN, CARROLL -- read once and referred
          to  the  Committee  on  Banks  --  committee discharged, bill amended,
          ordered reprinted as amended and  recommitted  to  said  committee  --
          again  reported from said committee with amendments, ordered reprinted
          as amended and recommitted to said committee

        AN ACT to amend the banking law, in relation to the forbearance of resi-
          dential mortgage payments

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section  1.  The banking law is amended by adding a new section 9-x to
     2  read as follows:
     3    § 9-x. Mortgage forbearance. 1. As used in this section, the following
     4  terms shall have the following meanings:
     5    (a) "Covered period" means March 7, 2020 until the date on which  none
     6  of  the provisions that closed or otherwise restricted public or private
     7  businesses or places of public accommodation, or  required  postponement
     8  or  cancellation  of  all non-essential gatherings of individuals of any
     9  size for any reason in Executive  Orders  202.3,  202.4,  202.5,  202.6,
    10  202.7, 202.8, 202.10, 202.11, 202.13 or 202.14, as extended by Executive
    11  Orders 202.28 and 202.31 and as further extended by any future Executive
    12  Order,  issued in response to the COVID-19 pandemic continue to apply in
    13  the county of the qualified mortgagor's residence;
    14    (b) "qualified mortgagor" means an individual who resides in New  York
    15  whose  principal dwelling is encumbered by a home loan pursuant to para-
    16  graph (a) of subdivision six of section thirteen  hundred  four  of  the
    17  real property actions and proceedings law or whose principal dwelling is
    18  a  co-operative  unit  whose shares are encumbered by any loan otherwise
    19  meeting the requirements of a home loan under paragraph (a) of  subdivi-
    20  sion  six  of section thirteen hundred four of the real property actions
    21  and proceedings law, from or serviced by a regulated institution;
    22    (c) "regulated institution"  means  any  New  York  regulated  banking
    23  organization as defined in this chapter and any New York regulated mort-
    24  gage servicer entity subject to supervision by the department; and
    25    (d)  "trial  period  plan" means an agreement whereby the mortgagor is
    26  required to make trial payments in full  and  on-time  in  order  to  be
    27  considered for a permanent loan modification.

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD16167-13-0

        A. 10351--B                         2

     1    2.  Notwithstanding  any  other  provision  of law, New York regulated
     2  institutions shall:
     3    (a) make applications for forbearance of any payment due on a residen-
     4  tial  mortgage of a property located in New York widely available to any
     5  qualified mortgagor who, during the covered period, is in arrears or  on
     6  a  trial  period plan, or who has applied for loss mitigation and demon-
     7  strates financial hardship during the covered period; and
     8    (b) grant such forbearance for a period of one hundred eighty days  to
     9  any  such  qualified  mortgagor  who  is in arrears or on a trial period
    10  plan, or who has applied for loss mitigation and demonstrates  financial
    11  hardship,  with  the  option  to extend an additional one hundred eighty
    12  days.
    13    (c) Such forbearance may be backdated to March seventh,  two  thousand
    14  twenty.
    15    3.  Notwithstanding  any other provision of law, any mortgage forbear-
    16  ance granted by a regulated  institution  pursuant  to  executive  order
    17  number  202.9  of  two  thousand twenty, this section, or any other law,
    18  rule or regulation to the qualified mortgagor as a result  of  financial
    19  hardship  during  the  covered  period shall be subject to the following
    20  provisions:
    21    (a) the mortgagor shall have the option to extend the term of the loan
    22  for the length of the period of forbearance.  The regulated  institution
    23  shall  waive  interest  on the principal for the term of the forbearance
    24  and waive any late fees accumulated as a result of the forbearance; or
    25    (b) the mortgagor shall have the option to have  the  arrears  accumu-
    26  lated  during  the forbearance period payable on a monthly basis for the
    27  remaining term of the loan without being subject to  penalties  or  late
    28  fees incurred as a result of the forbearance; or
    29    (c)  if the mortgagor is unable to make mortgage payments due to mort-
    30  gagors' demonstrated hardship and the mortgagor and  regulated  institu-
    31  tion  cannot agree on a mutually acceptable loan modification, the mort-
    32  gagor shall have the option to  defer  arrears  accumulated  during  the
    33  forbearance  period as a non-interest bearing balloon payment payable at
    34  the maturity of the loan consistent with the  safety  and  soundness  of
    35  such regulated institution, or at the time the loan is satisfied through
    36  a  refinance  or  sale  of  the property. Any late fees accumulated as a
    37  result of the forbearance shall be waived.
    38    (d) The exercising of options provided for in paragraph  (a),  (b)  or
    39  (c)  of  this subdivision by a qualified mortgagor shall not be reported
    40  negatively to any credit bureau by any regulated institution.
    41    4. Notwithstanding any other provision of  law,  adherence  with  this
    42  section  shall  be  a  condition  precedent  to commencing a foreclosure
    43  action stemming from missed payments which  would  have  otherwise  been
    44  subject  to  this section.   A defendant may raise the violation of this
    45  section as a defense to a foreclosure action commenced   on the  defend-
    46  ant's  property  when such action is based on missed payments that would
    47  have otherwise been subject to this section.
    48    5. Notwithstanding anything to the  contrary  in  this  section,  this
    49  section shall not apply to, and does not affect any mortgage loans made,
    50  insured,  or  securitized by any agency or instrumentality of the United
    51  States, any government sponsored enterprise,  or  a  federal  home  loan
    52  bank,  or  the rights and obligations of any lender, issuer, servicer or
    53  trustee of such obligations,  including  servicers  for  the  Government
    54  National Mortgage Association.
    55    § 2. This act shall take effect immediately.
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